Monday, June 25, 2012

The New York Post reported on Monday that “Startling new data from Uncle Sam show that defections by Americans are expected to double this year, largely to avoid any stiff tax bills resulting from the proposed 55 percent hike on the rich — as well as the likely expiration on Dec. 31 of the Bush era tax cuts.”

The number of Americans renouncing their citizenship has more than doubled over the past year, from 3,805 in 2011 to about 8,000 in 2012. The Post does not introduce any hard data to establish the income level of these expatriates, but quotes a lawyer from a firm that “specializes in protecting assets of the wealthy” who explains that “high-net-worth individuals are making decisions that having a U.S. passport just isn’t worth the cost anymore.”

The cost of escaping American taxation is a 15 percent exit tax on all assets, while preferred tax-haven destinations include Australia, Norway, Singapore (where Facebook billionaire Eduardo Saverin headed) and the U.S. possessions in the Caribbean, where full-time residents pay an effective tax rate of just 3.5 percent.

It’s disturbing for those of us trapped on the Titanic to hear so many lifeboats hitting the water, while Captain Obama keeps the bow pointed firmly at the approaching iceberg of fiscal collapse and bellows for full steam ahead. Of course, there will be plenty of efforts to demonize these fleeing billionaires, as parasite Democrats like Senator Chuck Schumer screamed their hatred at Eduardo Saverin’s back, and made clumsy legislative attempts to pick his pocket one last time before his assets vanished over the Pacific horizon. But these people deserve neither public scorn nor official attack, because a crucial component of American government is its need to obtain the consent of the governed.

Any government, whether it be a city, state or nation, that makes itself financially unattractive is going to have the same problems. Just look at California and New York, both high tax states that are shedding businesses and wealthy residents as fast as those people can get out of town. And I can't blame them.

I had a conversation with a retired guy at the car dealer just a couple days ago. He's apparently got a few bucks (he told me he had a couple hundred acres of land in Florida) and he said it's time to leave California. He's looking for a home in a lower tax state where he can live out his years with a better standard of living than he'll enjoy if he stays here. Meanwhile, we'll replace this guy's wealth with two or three illegal immigrants who earn little, pay little or no taxes, and probably take more from the welfare system than they'll ever contribute. The cycle of collapse will continue.